The domestic scrap metal market is in an unprecedented turmoil as the UK, along with the rest of the world, battles the COVID-19 pandemic.
There has been a reduction in all levels of operation, with some of the largest companies either closing completely or operating fewer sites with minimal skeleton staffing. The flow of material into these sites is being further hampered by social distancing rules, which mean that the majority of companies are not dealing with their normal customer base. Domestic steel mills are phoning many merchants on an almost daily basis as they try to secure a diminishing supply.
Export markets have also been disrupted. With fewer available outlets, the container, deep-sea and short-sea ferrous markets almost collapsed at one point with price offers for HMS 80/20 dipping some 48% from the start of the year. In recent days, however, some containerised sales have been completed and price increases in Spain and Turkey have lifted the mood slightly, albeit very tentatively. At the time of writing, for example, price levels for containerised HMS 80/20 are 23% off the 2020 market peak, so are we seeing small signs of emerging hope?
At present, it is unclear how UK material volumes have been affected (although it is anticipated to be huge) or when volumes will return, but it is evident that we will need the market participation of the entire world to return to anything near normal.
Mellor Metals Ltd (GBR), Board Member of the BIR Ferrous Division